SEC v. Hope Advisors LLC, et al.
Case No. 16-cv-01752- LMM (N.D. Ga.)
On May 31, 2016, the Commission filed a complaint (the “Complaint”), which was amended on January 11, 2017 and August 30, 2017, against Hope Advisors, LLC (“Hope Advisors”), Karen Bruton (“Bruton”), Todd Wortman (“Wortman”), and Dawn Roberts (“Roberts”) (collectively, the “Defendants”), and Just Hope Foundation (the “Relief Defendant’). The Complaint alleged that, from at least October 2014 to the date of the filing of the Complaint, the Defendants violated federal securities laws by scheming to collect extra monthly fees from a pair of hedge funds they managed. In order to circumvent the funds' fee structure under which the firm is entitled to fees only if the funds' profits that month exceed past losses, Hope Advisers and Bruton orchestrated certain trades that enabled the funds to realize a large gain near the end of the current month while basically guaranteeing a large loss to be realized early the following month. Without the fraudulent trades, Hope Advisers would have received almost no incentive fees since October 2014. See Complaint.
Hope Advisors and Bruton were ordered, and have paid, a total of $1,487,235.00 in disgorgement and penalties to the Commission. The Commission was ordered to hold all funds, pending further order of the Court. See Hope Advisors and Bruton’s Final Judgment.
On September 18, 2018, Wortman and Roberts were ordered to pay a $100,000.00 and $75,000.00 civil penalty (respectively) to the Commission, pursuant to a one-year payment plan. The Commission was ordered to hold all funds, pending further order of the Court. See Wortman’s Final Judgment and Roberts’ Final Judgment.
On July 16, 2019, the Court entered an order establishing a Fair Fund for the monies paid by the Defendants and any future funds collected from the Defendants pursuant to their respective Final Judgments (the “Fair Fund”). The Court also appointed Miller Kaplan Arase LLP as the Tax Administrator of the Fair Fund. See the Court’s Order.
On March 1, 2021, the Court issued the order approving the Amended Plan. See the Court’s Order.
For more information, please contact the Commission:
Office of Distributions